ImClone Systems Inc. (NASDAQ: IMCL) is a biotech buyout bonanza stock that traders and investors have been watching closely. The company has said that the proposed $60.00 per share cash buyout from Bristol-Myers Squibb Co. (NYSE: BMY) is inadequate. Carl Icahn has been holding out for a better price and has been seeking other suitors. Icahn noted that the CEO of another pharmaceutical company has now submitted a proposal that is subject to due diligence, but not to financing to acquire ImClone for $70.00 per share in cash. ImClone has agreed to allow the company to conduct due diligence for a two-week period, subject to a confidentiality agreement, accordiing to Icahn.
The press release also noted that there was no determination ifthe $70.00 bid would be adequate to acquire the company. Wall Street was anticipating a higher offer. Shares closed at $63.65yesterday and are now trading around $70.00 in thepre-market. Back at the height of the Erbitux news in 2004, this stockbriefly traded north of $80.00 before going down to under $40.00 formost of the 2005 to 2007 period.
Getting a higher bid like this may not result in a deal and theforward valuations will become an issue of concern based upon forwardestimates. Icahn has said that announcements regarding the pipelineand current developments make the company more valuable. How much morevaluable is up for debate.
We have seen roughly600,000 shares trade hands. Day traders are going to be active in thisstock with shares at multi-year highs.
Jon C. Ogg
September 10, 2008